The research efforts in the Epithelial Carcinogenesis Group are concerned with two major topics: 1) the regulation of growth and differentiation in tracheo-bronchial epithelium and 2) the mechanisms involved in multi-step neoplastic transformation of the same epithelial. A controversy has developed in recent years regarding the identity of the stem cells in the tracheo-bronchial epithelium. The old hypothesis stated that basal cells give rise to secretory and ciliated cells and act as primitive stem cells. This hypothesis has recently been challenged, because it was found, that following injury, the main proliferative cell compartment is the compartment of secretory cells. To investigate this important problem, we isolated two different cell types from the airways of rabbits, using centrifugal elutriation procedures, namely bronchiolar Clara cells and tracheal basal cells. The highly purified cell preparations were then cultured in an in vivo culture system which fully supports the differentiation of all major tracheo-bronchial cell types. The results showed that Clara cells have stem cell properties, since they generate Clara cells as well as ciliated cells (but not basal cells or mucous cells). Tracheal basal cells grown under the same conditions generated basal cells, mucous cells and ciliated cells but not Clara cells). These results suggest that Clara cells are the epithelial stem cells of the bronchiolar epithelium and that basal cells are the stem cells of the large conducting airways (trachea and bronchi); they further suggest that Clara cells and basal cells represent two separate stem lines of epithelial cells. Studies are now underway to define the various cell types in the airways more precisely with the use of biochemical and immunological cell surface markers. We are also examining the sensitivity of Clara and basal cells to factors such as retinoids, TGFbeta, Ca2+ and TPA which regulate and modulate epithelial cell differentiation. Another important ongoing project is to study the susceptibility of basal cells to chemical transforming agents.